Slides

1. So a survey taken in 2009 immediately after the Global financial crisis and then later in 2013
show that despite best intentions, the budget allocated to Training and development had
actually reduced. The reasons cited were growing uncertainty in the market and less
economic growth
2. The study aims to correlate the existing market conditions, both overall and product specific
and the changes in T&D investment. General uncertainty refers to overall uncertainty in the
market. Product specific uncertainty refers to fluctuations in demand for the specific
products/services. General T&D refers to T&D given to employees for grooming and career
development like PGDM/MBA etc. Firm specific T&D refers to short term skill specific T&D to
perform their jobs more efficiently.
3. So two hypotheses were taken. First was that if the overall uncertainty increased, the
investment in T&D would decrease. The second one is that firms would invest less in general
T&D than firm specific T&D under financial constraints.
4. The findings are not overwhelming, but suggest that it holds true for more than half the
companies evaluated.
5. So from the study, it was shown that for high uncertainty, overall T&D dropped by 19.3 %,
almost one fifth. In this, 27.8%, almost 30% was general T&D and 12.5% was firm specific
T&D, which supports our hypotheses. In contrast, in low uncertainty, T&D investment
increased by 5.3% of which 10.5% was general T&D and 4.8% was firm specific T&D
6. It is very clear that general T&D is the first budget on the chopping block during times of
uncertainty. But the moment it is reduced and programs are discontinued, employees see it
as lack of commitment from management side. Another issue that needs to be resolved is
the way T&D expenditure is accounted. Presently this is accounted as expenditure and
written off. It needs to be accounted as investment with returns over a few years like capital
investment.
7. After going through the given case, we concluded that "The Phillips ROI methodology " will
be best one to evaluate and come to a solution of this problem It provides a common
methodology that is replicable and can be validated across organizations.
8. By adopting this criteria, the organization would be able to create a dataset that would
include their ROI on T & D and they might also compare ROI of each program, after that they
may or may not go for investing on T & D based on observation and conclusion. So based on
this approach, we have come across the following suggestions.
9. Large amount of resources and time go into making credible ROI calculations and require
large datasets. Consuming resources at a time of financial uncertainty may not be feasible.
Also, considering the complexity and skill, we cannot practically apply it to all T&D activities.
Phillips himself sets 10% as a target.
10. Since the resources available will be less, investment should be in those T&D activities which
will give better ROI. The HR system needs to be flexible enough to respond to varying
degrees of uncertainty and change T&D programs accordingly
11. The HRD head should sit with the accountant and ensure that T&D is an investment and not
expenditure. ROI calculation etc should be clarified so that efficacy of the program can be
evaluated . Cutting T&D is likely to be viewed by employees as a lack of commitment and
can lead to negative behaviors and attributes as well as jeopardize the dynamic capability.
12. During the ongoing pandemic situation, even more emphasis should be laid on training the
older as well as the fresher employees regarding the newer ways to develop the business
and increase ROI of the company during this tough time. Innovations should be appreciated
 and encouraged such that if an employee thinks of a newer innovative idea of customer
dealing, then he might feel free to put it forward and not suppress it.
13. We can include PSUs and Pvt co.s to find out the difference in approach to T&D during
uncertainty. We can interview at more levels to ensure perspective and feed back from each
level is recorded for comparison. Data collection through Online questionnaires and virtual
meetings is suggested view existing COVID protocol. Sales data prior uncertainty can be
obtained from past records for comparison with existing levels.
14. The variables as shown can be used for the study. Size, capital investment, sales/employee,
effect of trade union and environmental laws, demographic/region centred factors etc
should be considered. Factors like national context etc can be removed since we’re
considering only India.
15. Thank you